Intel unveiled its Classmate 2 reference design at last week's Bett education exhibition at Olympia in London, with the aim of bringing a convertible tablet PC to millions of schoolchildren across the globe. It works as a normal laptop PC, but you can swivel the screen round and fold it over the keyboard, which turns it into a touch-screen tablet PC. Children can then draw on the screen, or use it for handwriting recognition.

We've had convertible PCs for more than a decade, of course, but few people use them. Will that change? Possibly. The Classmate 2 is a cheap, durable, child-sized PC based on Intel's Atom netbook chipset and, like the original Classmate, it could tap a previously unexploited market.

At Bett, Intel's European vice-president, Gordon Graylish, told me: "We now have over 40 companies developing the original Classmate, nine companies have started building the convertible, and there are 30 companies in 40 countries developing software as part of the Intel Learning Series Alliance." The software bundle includes the Smart Classroom Suite, from the leading interactive whiteboard company.

"It's not about the device," says Graylish, "it's about supporting the local language, the local culture, and local manufacturers who understand how the [education] system works. It's about getting the right software environment, and making sure teachers are trained. The last thing we want is computers sitting in closets."

Intel reckons Classmate 2 convertibles are being produced by CTL and others in the US, by NEC in France, ASI in Australia, Hanvon in China, and the UK's CMS. CMS tells me it's making its Classmate PC, the Fizzbook Bang, in Liverpool, but will source the convertible Fizzbook Spin from Taiwan until sales volumes increase.

Zoostorm sells the Fizzbook Bang via Amazon, Argos, Littlewoods and other outlets, so Classmate PCs are not limited to educational buyers (fizzbook.com).

Graylish says that more than 1m Classmate PCs have now been shipped, counting all the brands. These will continue to be sold alongside the new convertible, and alongside the growing number of netbooks based on the same technology.

Also, Portugal has ordered half a million Magellan, or "Magalhães", Classmates, with Venezuela opting for 1m of the same design. This version - designed by Ceiia and built by JP Sá Couto - will have a larger screen and 3G and/or WiMax connectivity.

One of the annoying things about Classmate PCs is that, while they are available with Windows or Linux, Microsoft's ultra-cheap deal is only for XP Home. This lacks the tablet PC features found in XP Pro. Intel says you can use its ILS suite instead, while CMS points out that schools and local education authorities with Windows site licences can upgrade to Pro for a trivial sum. But people who don't have site licences will have to pay a silly price for XP Pro to get features that should be part of the operating system.

One of the unknowns is whether Microsoft will offer a cheap deal on Windows 7, which works well on an Atom-powered netbook with 1GB of memory (I've tried it on a Dell Vostro netbook, like the Mini 9).

Microsoft slashed the price of XP Home so as not to lose too much of the netbook market to Linux, and this has had an impact on its profits.

Either way, Microsoft can't charge as much for Windows on a £250 netbook as it did on a £2,000 desktop. Is it time for the answer that we suggested on minicomputers - software prices that are based on the power of the processor?